"A credit agreement is expected to be signed between the Vnesheconombank state-run corporation and Germany's KfW Ipex-Bank," said Prikhodko.

The Russian President and German Chancellor will also discuss the issue of a joint bid for German carmaker Opel by an international consortium of Austrian-Canadian auto supplies company Magna and Russia's largest bank, Sberbank.

Prikhodko said, "We will call on them to support the deal. We will also voice our support for it.”

On May 30, Berlin agreed to support the Magna International and Sberbank consortium to take over Opel, currently owned by US car giant General Motors. Russian truck maker GAZ, owned by billionaire Oleg Deripaska, is prepared to act as industrial partner.

But now it looks like OPEL's parent company GM is considering offers from other contenders, including China's Beijing Automotive.

The two leaders will also discuss Nord Stream, the new joint multi-billion dollar undersea pipeline to pump gas into Europe.

It will run under the Baltic Sea directly from Russia to Germany, so that the fuel can avoid using transit countries.

Also, German engineering giant Siemens AG and Russia’s rail monopoly Russian Railways (RZD) are set to sign an agreement to establish a joint venture for the production of a new generation of locomotives.

The parties are also expected to sign a memorandum of understanding to modernize Pulkovo airport in Russia's Northern capital of St. Petersburg.

On a more global scale, Medvedev and Merkel are also expected to talk about North Korea, Iran and last week's G8 summit in Italy.